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ACCA Applied Knowledge · Business and Technology · Social and demographic factors

A country's government statistics show that the proportion of citizens aged over 65 is rising steadily while the birth rate is falling. Which of the following is the most likely direct implication for businesses operating there?

The most likely implication is greater demand for products and services aimed at older people, along with possible labour shortages. A rising share of over-65s and falling births mean more elderly customers and fewer young entrants to the workforce, while demand for healthcare rises rather than falls.

  1. AIncreased demand for products and services aimed at older people, and potential labour shortagesCorrect
  2. BA guaranteed fall in the average age of the workforce
  3. CAn automatic increase in demand for children's toys
  4. DA reduction in the need for healthcare services

Explanation

An ageing population with a low birth rate increases demand for healthcare, leisure and retirement services aimed at older customers. It also shrinks the pool of younger workers, creating possible labour shortages. The other options point in the opposite direction to the demographic trend.

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